Regulations: economic analysis and review.

(1) The Administrative Procedure Act governs the procedure for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the Office of Administrative Law. The act requires that state agencies proposing to adopt, amend, or repeal any administrative regulation assess the potential for adverse economic impact on California business enterprises and individuals, as specified. This bill would require the standardized economic assessment to consider additional factors, such as the benefits of the regulation and the extent to which it will achieve regulatory and statutory objectives. The bill would require agencies preparing the economic assessment to request a review of the assessment by the University of California, and to include any review by the university with the assessment. The bill would require the Department of Finance to adopt regulations, on or before June 30, 2013, to guide agencies in conducting the standardized economic assessments, as specified. This bill, commencing January 1, 2014, would make the standardized economic assessment requirements applicable only to a proposed regulation that the agency has concluded may have an economic impact of more than $50,000,000. (2) The act requires an agency that seeks to adopt a regulation to issue a notice of proposed action that contains prescribed information, including an informative digest that includes, among other things, a policy statement overview explaining the broad objectives of the regulation. This bill would also require the policy statement to explain the specific benefits anticipated by the regulation and evaluate whether the proposed regulation is inconsistent or incompatible with existing regulations. (3) The act requires an agency to prepare and submit to the office with an adopted regulation a final statement of reasons that includes, among other things, a determination that no alternative considered by the regulation would be more effective, or equally effective and less burdensome, than the regulation, and an explanation setting forth reasons for rejecting alternatives that would lessen the adverse economic impact of the regulation. This bill would require this determination to be based, in part, on the economic impact assessment, if an assessment is required. The bill would also require that the economic impact assessment be included in the final statement of reasons as supporting information for an explanation for rejecting alternatives that would lessen the adverse economic impact of the regulation. (4) The act establishes a procedure for a priority review of existing regulations by the office, pursuant to a request by specified committees of the Legislature, to determine if a regulation continues to meet prescribed standards. This bill would authorize any interested person to petition an agency to perform an economic analysis on an existing regulation. The bill would require the agency to conduct the analysis, except in specified circumstances. (5) The act requires the office to approve, or disapprove and return to the agency, all regulations adopted pursuant to the act using specified standards. The act requires the office to return a regulation to the agency in specified circumstances, including failure to comply with the requirement to assess the economic impact of the proposed regulation. This bill would provide, for purposes of that provision, that noncompliance includes failing to complete an economic impact assessment, if one is required, as specified. The bill would specify additional criteria that would require the return of a proposed regulation, as specified. (6) The act exempts the Public Utilities Commission, the State Water Resources Control Board, and the San Francisco Bay Conservation and Development Commission from specified provisions of the act. This bill would revise the exemptions and require these entities to comply with specified requirements regarding the performance of the economic analysis. (7) Existing law authorizes the Joint Legislative Budget Committee to appoint a Legislative Analyst, who has specified duties. This bill would require the Legislative Analyst to prepare a benefit-cost analysis, as specified, of proposed legislation that he or she has identified as having a potential cost to the California economy of more than $50,000,000 in one year, or that would adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health or safety.